Concerns raised as data centres go underwater in China

Several kilometres off the coast of Shanghai, a bright yellow platform towers over the ocean. The surrounding five hectares are dotted with offshore wind turbines, all connected directly to this data centre, the heart of which is situated 10 metres under water.

This pioneering wind-powered facility takes advantage of the cool seawater to avoid energy and fresh-water use that would be needed on land.

AI technology and the smart economy are growing quickly in China. The country had 60 AI data centres operating or under construction by the end of 2023. This year, the figure is 250. Local governments and companies see underwater data centres as a new and more sustainable approach. But experts warn it is too early to say if they really are a green solution, voicing concerns over their impacts on nearby organisms.

Dialogue Earth asked those experts to break down the good news and the bad for the environment.

Huge energy consumption

More data centres going up has led to concerns over land use and the consumption of energy and water. China’s smart economy needs to tackle this as a matter of urgency. By 2030, data centres will be behind 4.8% of the nation’s electricity use, as predicted by the Beijing Institute of Technology in 2025 research.

Data centres use more electricity for cooling than for anything else other than powering the IT equipment itself, Yang Haosen, an associate professor at Dalian University of Technology’s School of Electrical Engineering, told Dialogue Earth. Underwater installations, using seawater for cooling, save 18% to 28% of total power use for the same amount of server power, he said.

The CNY 1.6 billion (USD 240 million) facility off Shanghai’s Lingang is a joint project between Shanghai HiCloud Technology and at least two state-owned enterprises. HiCloud’s project lead Chen Xiyi told China Central Television that an equivalent 2.3-megawatt data centre on land would be cooled by about 40,000 tonnes of fresh water a year – enough for 100 households. The Lingang facility, of course, uses none.

According to HiCloud, the direct connection to adjacent wind turbines means it is also 95% powered by green electricity. In some places, wind farms produce more power than can be consumed or stored and offshore data centres could take up that excess green power, said Hu Zhenyu, director of the China Sustainable Development and Marine Economy Institute.

Hu said that other local governments in China have expressed interest in running pilot projects similar to the one off Lingang.

This isn’t HiCloud’s first underwater data centre. In 2023, sister company Shenzhen HiCloud Data Center Technology set up a commercial example, with servers in three sealed capsules, placed on the seabed of Qingshui Bay, Hainan. The company says it plans to eventually build 100 of these capsules at a total cost of CNY 5.6 billion (USD 830 million), without specifying the location.

A HiCloud employee in Shenzhen told Dialogue Earth that the Hainan facility was still running after 40 months, with “zero failures, zero incidents”. Reports show that HiCloud is working on the project with China Telecom and the Alibaba Group’s AI subsidiary Alibaba Cloud.  

The employee says the company is now planning for the second phase in Hainan. HiCloud’s website shows 30 capsules will be deployed in that phase, and the third phase will see the final 70 capsules deployed. 

Will underwater data centres heat the ocean?

Local governments have high hopes for the new technology, but there’s little understanding of how it might affect ecosystems. HiCloud’s data centres in Shanghai pump seawater into a heat exchanger, where it absorbs heat from inside the facility and is pumped back out, now warmer.

Stephen Watson, senior ecosystem services researcher at Plymouth Marine Laboratory, said: “The heat given off by underwater data centres may have behavioural or biological effects on species living in the immediate vicinity, particularly those which are unable to move away.”

A staff member introduces a model of a junction box that monitors the seafloor surrounding the undersea data centres in Lingshui, Hainan (Image: Zheng Yue / Xinhua / Alamy)

HiCloud does not currently release figures on how much heat its facilities output. The project assessment document for the Lingang facility says it can pump out 150 litres of water a second, 5C warmer than at input. “The outflow is relatively small,” states the document, “and will soon mix with surrounding water”. There will be “no significant effect on the marine environment,” it adds.

HiCloud’s website says a trial at sea shows the heat exchanger brings an increase of less than 1C within a two-metre radius, meaning environmental impact is “negligible”. It is unclear when the trial took place.

John Abraham is a professor of mechanical engineering at the University of St. Thomas, Minnesota. He says that the small amounts of warmer water discharged mean there is minimal chance of a significant increase in regional water temperatures, but there may be a more direct impact for organisms very near the intake and discharge pipes. He said: “A 4-5C increase can certainly matter biologically, particularly during hot summer conditions when organisms may already be near their thermal limits. Organisms that cannot move away could be more vulnerable.”

He called the ecological risk “real but geographically quite limited”.

Coastal nuclear power plants also rely on seawater for cooling and while they discharge much larger quantities of warmer water, research into their long-term impacts may still be of reference value. Wang Youshao of the Chinese Academy of Sciences’ South China Sea Institute of Oceanology, has examined the ecologies surrounding the Daya Bay nuclear power plant in Guangdong.

His studies found that from 1993, when the plant began operating, it discharged 95,000 litres of warmed water per second, causing temperatures in a 5.5 sq km area on the western side of the bay to increase by about 1C.

The potential fishery yield apparently doubled after the plant started operating, based on the activities of phytoplankton, tiny organisms at the base of the marine food web. Yet, the biomass of bottom-dwelling organisms fell from 318 grams per sq metre in 1991 to 45 grams in 2004, while the number of species fell from 250 to 177.

Hu Zhenyu and Stephen Palumbi, professor of marine sciences at Stanford University, both warned that the anti-fouling paints that coat underwater data centres could flake off and cause pollution.

“What happens if it flakes off and washes up on beaches where children are playing?” Plaumbi asks. “What happens if it is eaten by fish that fishermen catch and sell?” Project approval documents for the Lingang facility say the anti-corrosion layer won’t affect marine sediment.

According to Hu Zhenyu, environmental impact assessments for underwater data centres currently focus on the construction phase. The longer-term impacts of operation and decommissioning aren’t studied enough. More monitoring of the consequences of warmer temperatures for marine life is needed, he said.

At the time of publication, HiCloud had not responded to Dialogue Earth’s request for data on its operational projects.

Transparency in the data centre industry has long been a problem. Eric Masanet is professor in emerging technologies and sustainable development at the University of California Santa Barbara. He said: “Most data centre operators don’t report on specific data centres or projects. This includes Amazon and Microsoft.”

He thinks operators of underwater data centres should make information on their environmental impact and energy use available to policymakers and local communities.

Will it make money?

It’s not just China. Singapore, Korea and the US are among the countries looking at using seawater to cool data centres. In April this year, Korea’s ocean ministry announced a pilot project in the waters off the country’s industrial powerhouse, Ulsan.

Hu Zhenyu says underwater data centres are a new undertaking. The idea is still being explored and tested, and there are various questions to be answered before commerciality is achieved. However, those risks are played down in corporate communications, he says.

Microchips used for AI computing are constantly being improved and may need to be replaced every year or two. Doing that in an underwater data centre is expensive and this will increase running costs, he adds.

Operational and maintenance costs will be higher, and it could take days or weeks to get back up and running after a typhoon or damage to an underwater cable, Hu adds. While a facility on land might only need hours.

For Yang Haosen, who researches energy use in AI, underwater data centres have potential. He says they could be an important complement to on-land centres and make more efficient use of renewable energy.